If I understand your question, I'd say the answer is a qualified yes.
Whether there is a limit to how large the space between the fire riser (that is what the insulated vertical element of the j-tube is normally called) and the outer barrel (or welded up plate in your example), I do not know. I suspect not within reason; but what is "reasonable" is then the question. Think in terms of bell masonry heater design. So long as the containment area of the bell is less than that which will cause all the heat to be sucked out and vapor to condensate before rising out of the heater (through the chimney, into the atmosphere), it will work (assuming a properly designed and installed chimney is in place, and other factors that constitute a good draft, pulling the exhaust out of the house).
The next question, is why?
Why would you *not* wish to benefit by having thermal storage of the heat? It is this which moderates the heat released into the room. Without substantial thermal mass, the rocket heater works a lot like a wood burning stove: hot when burning and cold when not burning. The difference is the rocket heater burns through the wood much more quickly than a wood burning stove. For many reasons this is a very good thing; however, one reason this is *not* a good thing, is unless you have thermal mass to capture and slowly release all that fire energy (heat) it is less comfortable as a heat source, and requires being burned more often, and when burning requires more attention than a common wood burning stove (Peterburg's batch box eliminates that headache, but cannot alter the physics of high heat production without thermal mass to capture and then slowly release that heat: a high rate of energy production is only half the system; capturing and slowly releasing that heat is the other half of the system).
I burned a test rocket stove/heater this past winter. I was primarily concerned with testing the basic build and operation (how I feel living with my dragon, as it were). Since I also built this on my carpeted living room floor, above a basement which I did not add support joist under, I did *not* add thermal mass (too heavy). The result is the barrel got the place pretty darn warm, and even hot at times (roughly a 1350 sq.ft. upstairs and 1200 or so in the basement; it did not heat the basement at all, so far as I could tell: heat rises, after all). It was nice when burning, in terms of heat output. And the things in the living room warmed to some degree, I'm sure, but nothing like a proper thermal mass would. As a result, temperatures began to drop as soon as the fire stopped burning. So I would run the temps up to 80 degrees F or more, and then cover up under my electric blanket whilst temps fell back to 50 F or so, and then either go to bed or start the heat/cooling cycle over again.
I still saved a lot of propane. So it was worth the trouble, in terms of money saved. I may have even paid for the supplies I bought to build the prototype (I'd have to check my records to be certain of that; if I didn't pay for them outright, I paid for a lot of the materials in saved propane costs). But I also learned a number of other things. Namely, for *me* the batch box is a better design, because I'd rather read a book than get up every 5 or 10 minutes to tend the j-style feed. And I really, really do need to add thermal mass; for me that has always been the plan, and this years build will accommodate that; but had I been doubtful of the benefit of thermal mass to capture that heat and slowly release it into the room over a period of hours, instead of minutes, I'm convinced I'd consider the thermal mass to be a good investment, both in efficiency and comfort.
There are all kinds of ways of making thermal mass look nice. I would not give up on that easily (in fact, I would not give up on that at all). I certainly recommend planning on adding thermal mass, be that bells, benches, or a design that has the appearance of a more traditional masonry heater. There are many beautiful designs, so it is hard for me to imagine not finding something you would enjoy living with.
That's my 2-cents. Add a couple buck and you can buy a cup of coffee